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Here at Willow Planning Group, we love small businesses because we are also one! Did you know that according to the U.S. Small Business Administration, small businesses in the U.S. employs almost 60 million people! Many small business owners have entrepreneurial leadership and creative ideas. What many don’t realize is that a good financial plan can go a long way in helping your business grow and succeed. Whether you are looking to start something new or expand on a side hobby, these tips can be helpful for your small business.
- Finding funding is one of the first things people do when starting a business, especially if the business will serve as their main source of income. Funding can come in many forms, from friends, family, loans, or personal savings. Make sure you have enough money to cover three years of business, as you may not see profits right away.
- Forecasting your revenue and expenses is essential to calculate how much you will need over the next few years, keeping in mind that things don’t always go according to plan.
- Creating a cash flow schedule is a useful tool for managing cash on an everyday basis and making sure you don’t run out of it.
- Separate your monthly fixed expenses, things like monthly subscriptions to software you use, rent, insurance, salaries, and the list goes on. This is the minimum amount of cash you will need on hand, and then you can start thinking about those variable expenses like inventory and commissions.
- Think about spending on things that will help your business grow, like marketing.
- Make sure you know your legal structure. The most common ones are sole proprietorship, partnership, limited liability company, and a corporation. Depending on which structure you choose, you will pay taxes differently.
- QuickBooks, Wave, Honeybook, and Bench are software that can help keep your finances organized by helping invoicing customers, paying bills, generating reports, and preparing taxes. It will help keep track of your business activities and help separate your personal finances from your business finances.
We hope these tips will help you with starting or growing your small business!
Katerina Logrono is a Paraplanner at Willow Planning Group, LLC. She is primarily responsible for supporting you in reaching your personal financial goals. Katerina loves exploring new places while helping you live your adventure too!